Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

AUSTRALIAN RENEWABLE ENERGY AGENCY BILL 2011

The Australian Government has developed a comprehensive plan to move to a clean energy future. This plan includes introducing a carbon price, promoting innovation and investment in renewable and low emissions energy, encouraging energy efficiency, and creating opportunities in the land sector.

Central to the plan is the introduction of a carbon price to reduce greenhouse gas emissions, by encouraging more efficient use of energy and driving investment in cleaner energy sources. A price on carbon, coupled with the 20 percent by 2020 Renewable Energy Target, provide powerful incentives to find ways of lowering carbon emissions when we produce and use energy.

With the introduction of a carbon price in Australia, the Government is focussed on ensuring that Australia's emissions reductions will be achieved at least economic cost, whilst maintaining adequate, reliable and affordable energy supplies and the international competitiveness of Australian industries.

There is a strong case for the Australian Government to help drive down the costs of renewable energy and reduce the carbon intensity of the energy sector by encouraging innovation in clean energy. The Government is substantially boosting its support for innovation in clean energy as a central element of its clean energy future plan.

A new $10 billion Clean Energy Finance Corporation will invest in the commercialisation and deployment of renewable energy, energy efficiency and clean technologies. A new Australian Renewable Energy Agency, or ARENA, will streamline and centralise the administration of $3.2 billion in existing support for renewable energy.

This Bill establishes ARENA, the members of its Board and its Chief Executive Officer and Chief Financial Officer and sets out how ARENA will operate and will be funded. To ensure that momentum in the renewable energy industry is sustained and quickly built on in the future, ARENA is to commence operation from 1 July 2012.

The Government is currently providing substantial support for renewable energy across multiple programs and projects. The Government will consolidate and reform the management of these programs and projects by creating ARENA as an independent statutory authority under the Commonwealth Authorities and Companies Act 1997.

ARENA will have oversight of around $3.2 billion in existing renewable energy grant funding currently managed by the Australian Government and by Australian Government funded renewable energy bodies such as the Australian Centre for Renewable Energy and the Australian Solar Institute.

Around $1.7 billion of this funding is currently uncommitted and will be available for ARENA to provide financial assistance for:

The definition of renewable energy technologies appropriately includes hybrid technologies.

The inclusion of hybrid technologies, by improving the economics of renewable energy projects, can allow ARENA to support more renewable energy projects than would be possible without hybridisation.

Likewise, ARENA will be managing a number of existing projects that involve hybridisation, such as the Solar Flagships Solar Dawn project, the King Island REDP project and the ACRE Solar Kogan Creek project.

ARENA will also be managing a number of existing programs that include hybrid technologies as eligible technologies – including the Emerging Renewables Program and the Renewable Energy Venture Capital Fund. ACRE's Strategic Directions explicitly recognises the benefits of hybrid systems, and ARENA will be mindful of this in carrying out its activities.

Under the definition of renewable energy I would expect that ARENA could support projects such as solar, biomass, biofuels, ocean and geothermal. Likewise, given that they are largely economic under the Renewable Energy Target, it is not envisaged that ARENA would support stand alone wind projects.

The definition of renewable energy also includes enabling technologies, such as storage.

ARENA will also be responsible for policy advice to the Minister for Resources and Energy and will take over and expand on the activities of the Australian Centre for Renewable Energy in this regard.

A key priority for ARENA will be act collaboratively with other interested and relevant parties to achieve its goals. To this end ARENA will continue and expand on the good work of:

The ARENA board will include renewable energy technology, business investment, commercialisation and corporate governance experience in order to deliver balanced decisions in terms of project viability and the choice of technology funded. The ARENA Board will draw on the considerable talent we have in the Australian business and renewable energy industries. It is intended that the ARENA board be open to cross membership with the board of the Clean Energy Finance Corporation once it is established. Likewise, recognising the need for a close working relationship with my Department to deliver ARENA's objectives, the Secretary of my Department will be a member of the ARENA Board.

To advise and assist ARENA in its duties, ARENA will be able to form committees. ARENA will also be able engage consultants to provide technical and specialist advice. The intention is that ARENA will form technology specific advisory committees to assist it in performing its functions.

Importantly, the funding to be provided to ARENA each year will be prescribed in this Bill out until 2020, providing long term funding certainty to the renewable energy industry. To ensure efficient use of public funds, funding allocated to ARENA each year will be held by the Australian Government and used to earn interest for the Australian public until it is required by ARENA.

An early task for the Board will be to develop its funding strategy guiding how it intends to allocate its uncommitted funds across the various renewable energy and related technology types, ahead of developing program guidelines outlining how eligible stakeholders can access funding.

The legislation also includes a number of accountability provisions – around the development of a funding strategy and around guidelines and procedures to seek approval for guidelines and projects if certain hurdles are met, as well as the need for merit based assessment. These requirements strike an appropriate balance between ARENA's independence and proper accountability.

I expect that the Board will manage its affairs in a manner reflecting the highest standards of probity and highest ethical standards and accountability, with program guidelines developed according to merit based principles. As mentioned, the legislation includes provisions to help meet these standards.

This Bill is the main Bill of two Bills related to ARENA establishment that I am introducing in this session. The other Bill I will introduce will provide for the transitional and consequential amendments necessary to transfer various projects and programs across to ARENA and wind up or incorporate the activities, staff and assets of the Australian Centre for Renewable Energy and the Australian Solar Institute.

AUSTRALIAN RENEWABLE ENERGY AGENCY (CONSEQUENTIAL AMENDMENTS AND TRANSITIONAL PROVISIONS) BILL 2011

This Bill is the second of two Bills related to the establishment of the Australian Renewable Energy Agency, or ARENA, that I am introducing to this session of Parliament.

As described when introducing the ARENA Bill, ARENA is to be an independent Commonwealth Authorities and Companies Act 1997 Authority, tasked with oversight of around $3.2 billion in existing renewable energy grant funding currently managed by the Australian Government and by Australian Government funded renewable energy bodies such as the Australian Centre for Renewable Energy and the Australian Solar Institute.

This Bill complements the main ARENA Bill, by providing for the transitional and consequential activities that need to occur in order for ARENA to take over funding and administration of existing programs and projects transferring from the Department of Resources, Energy and Tourism and the Australian Solar Institute, or ASI, to ARENA.

This Bill also provides for the wind up of the ASI and the Australian Centre for Renewable Energy, as a part of this transition process. This is a necessary step in the process to consolidate all of the various existing programs and projects supporting renewable energy technology innovation with ARENA, and is by no means a reflection on the performance of these organisations.

Under the arrangements proposed ACRE is to be wound up, with ARENA to take over and expand on its responsibilities for advising the Minister for Resources and Energy. To give effect to this change the ACRE Act 2010 will be repealed upon ARENA establishment.

It will be business as usual for the projects transferring to ARENA, with existing administration arrangements to continue until ARENA establishment. Likewise, a number of programs, such as the Emerging Renewables Program and the Renewable Energy Venture Capital Fund will continue. At the same time, it is expected that ARENA will determine how to best direct unallocated funding from programs such as the Connecting Renewables Initiative and the Solar Flagships program.

The timing for transfer of the ASI's projects, assets, liabilities and staff to ARENA is to be deferred until after ARENA establishment, with the transfer to occur some time before 1 January 2012. This is to allow the ASI time to complete its work in selecting and funding projects from the submissions received from its recent call for funding applications, before focusing on necessary transfer arrangements.

Following this transfer, the employees of the ASI are to become employees of the Department and will join other Department staff in providing operational and administrative support to ARENA. These arrangements will allow ARENA to benefit from the existing expertise and skills of the ASI staff, as well as embedding an established process and culture which has been highly effective in securing projects and leveraging funding.

To ensure that ARENA is able to pick up and carry on the work of the Department of Resources, Energy and Tourism and the ASI, this Bill also allows for ARENA to consider applications that are undecided at the time ARENA takes over program administration. For example, this means that should funding applications be received to a program or project announced between now and when ARENA is established, this would allow for those applications to continue to be considered by ARENA.

As Minister, I will receive the recommendation of the ARENA board with regard to appointment of the Chief Executive Officer, or CEO, of ARENA. To allow appointment of the ARENA CEO ahead of ARENA commencement this Bill also allows for members of the ARENA board, once appointed, to provide a recommendation with regard to the ARENA CEO ahead of ARENA establishment.

The arrangements in this Bill will provide for a quick and seamless transfer of existing programs and projects to ARENA and will allow for ARENA to commence operation with minimal disruption and loss of momentum in support for renewable energy technology innovation.

Ordered that further consideration of the second reading of these bills be adjourned to the first sitting day of the next period of sittings, in accordance with standing order 111.